Global Supply Chain February 2017 Issue by GLOBAL SUPPLY CHAIN

February 2017 Issue 34

ENHANCING THE BUSINESS OF LOGISTICS

VISION+STRATEGY+INVESTMENT=SUCCESS AT QATAR AIRWAYS CARGO

Fuel price

UAE removes subsidies

New dangerous goods warehouse Tristarâ&#x20AC;&#x2122;s new facility in JAFZA

Islamic banking

Gains strength in Bahrain

Albert Pang, CEO Oman International Container Terminal

We’re anchoring our position as the gateway to the Gulf.

With a newly expanded container terminal, investments of $25 billion and seamless sea-road-air access to the region’s largest markets, it’s no wonder so many companies choose to start their journey in SOHAR, one of the world’s fastest growing Port and Freezone developments.

Visit SOHAR at Gulfood 2017 26 February - 2 March Concourse One Stand CC3-14

Qatar Airways Cargo’s phenomenal growth SIGNATURE MEDIA FZ LLE P. O. Box 49784, Dubai, UAE Tel: 04 3978847/3795678 Email: info@signaturemediame.com Exclusive Sales Agent Signature Media LLC P.O. Box 49784, Dubai, UAE Publisher: Jason Verhoven jason@signaturemediame.com Director: Peter Dass peter@signaturemediame.com Managing Editor: Munawar Shariff munawar@signaturemediame.com Art Director: B Raveendran ravi@signaturemediame.com Production Manager: Roy Varghese roy@signaturemediame.com

Printed by United Printing Press (UPP) – Abu Dhabi Distributed by Tawseel Distribution & Logistics – Dubai

Contributor’s opinions do not necessarily reflect those of the publisher or editor and while every precaution has been taken to ensure that the information contained in this handbook is accurate and timely, no liability is accepted by them for errors or omissions, however caused. Articles and information contained in this publication are the copyright of Signature Media FZ LLE & SIGNATURE MEDIA LLC and cannot be reproduced in any form without written permission.

2016 was a fantastic year for Qatar Airways Cargo (QAC). Not only did the carrier jump up 10 places to be at the number three spot for cargo volumes carried, Qatar Airways Cargo also implemented IATA’s Cargo XML messaging being the first airline to fully adopt and integrate the next generation messaging standard and its own IT system CROAMIS is now being marketed and offered to others in the industry and are getting incredible feedback. QAC expects to outperform the market by strategically placing capacity in the right areas, and offering the right combination of cargo products to the right destinations. Ulrich Ogiermann, Chief Officer Cargo, Qatar Airways Cargo is optimistic about the opportunities in the air cargo market, and forecasts a significant growth in the air cargo business this year. Their location, at the crossroads between East and West, gives them a distinct advantage, as, from their state-of-the-art, fully automated cargo hub at Hamad International Airport in Doha, they can reach approximately 80 per cent of the world’s population within six hours. Page 26. Rickenbacker International Airport in Columbus, Ohio, USA, is a cargo only airport. Crew there recently unloaded a 777 in just 90 minutes. Once the plane was unloaded, the goods were trucked a mere 50 yards to a warehouse. This is not always the case at other airports. That speed translates to more efficient and cost-effective supply chains. Rickenbacker International Airport is a key element of Rickenbacker Inland Port, a multimodal logistics hub that offers efficient distribution through much of the US and Canada. The inland port is home to providers of logistics, warehouse, and aviation services. It offers direct connections to major ocean ports by rail on both coasts. Page 38. All this and lots more air cargo and other industry news inside. See you next month.

Munawar Shariff Managing Editor munawar@signaturemediame.com

FEBRUARY 2017 3

February 2017 Issue 34

ENHANCING THE BUSINESS OF LOGISTICS

26 06 News 16 Country report - Bahrain Bahrain raises profile Increasing prominence in the Middle East region

26 Cover Vision, strategy and investment equals success Munawar Shariff speaks to Ulrich Ogiermann, Chief Officer Cargo, Qatar Airways, about the air cargo industry

34 Fuel price July 2015 marked a watershed moment in the Arab Gulf’s decadeslong history of cheap oil, as the UAE became the region’s first country to remove subsidies for transport fuel

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38 Cargo-dedicated airport A cargo-dedicated airport speeds supply chain efficiency

44 Analysing the trends Although the wider world trade backdrop remains weak, business surveys point to near-term momentum for air cargo

48 Islamic banking gains strength Regulators are encouraging mergers and acquisitions in Bahrain’s Islamic banking industry

54 Growth by resilience Almajdouie Logistics Co has a unique formula for success, as CEO Baheej Biqawi shares with Global Supply Chain

58 New dangerous goods warehouse Tristar Group’s new facility in JAFZA is one of its kind in more ways than one

52 The Actros truck turns 20 60 The best logistics’ season Mercedes-Benz Trucks launches special edition Actros truck to celebrate model’s 20th anniversary

Amazon is ready to capture the best of the online market, with the 2016 holiday season being it’s best ever yet

Abu Dhabi Ports delivers IALA accredited courses to local maritime entities Abu Dhabi Ports, one of nine organisations to offer certified courses by the International Association of Marine Aids to Navigation & Lighthouse Authorities (IALA) worldwide, has conducted the IALA Aids to Navigation (AtoN) Level-two training course to the first group of external trainees from entities that provide maritime and offshore services in the UAE. The training course is based on IALA Level-2 Model Courses, the highest internationally accredited navigational standard, and was delivered to seven employees from the Critical Infrastructure and Coastal Protection Authority (CICPA) and Abu Dhabi Petroleum Ports Operating Company (IRSHAD) by Abu Dhabi Marine Services (SAFEEN), an operating unit of Abu Dhabi Ports. The training assimilation was evaluated via written and oral examinations conducted by IALA accredited instructor, Captain AbdulAziz Al Hammadi, Senior Navigation Service Manager at SAFEEN.

Coreworx Interface Management implemented in Oman Coreworx has announced that its interface management solution was selected and implemented on a US$ 3.6 billion (AED 13.2 billion) petrochemical complex project in Oman. The five-year project involves four major

6 FEBRUARY 2017

international EPCs from several geographic regions. â&#x20AC;&#x153;This project required a proven solution that could manage the large volume of project interfaces between the four primary EPCs, as well

as the numerous interfaces with regulatory agencies, local government offices, and suppliers/contractors. Designed for capital projects of all sizes, Coreworx Interface Management is successfully

handling the interfaces on this project and offering stakeholders unparalleled transparency and decision-making through unique Coreworx owner oversight tools and dashboards,â&#x20AC;? stated Ray Simonson, CEO of Coreworx.

CCS lynchpin to meeting climate change targets Chinese cross border shoppers cause massive out-of-stock in Germany The power of Chinese overseas retail shoppers has again come to attention. Several German media channels have run a story - ‘First milk powder, now shampoo - Chinese consumers, again, go crazy for our products’ – as Chinese cross border specialists have discovered the German anti-hair loss caffeine shampoo brand ‘Alpecin’. One of Germany’s biggest newspapers FAZ reports that the massive interest of Chinese importers, especially for the well-known antihair loss product Alpecin, has led to a situation where major German retailers were out of stock. While retailers are considering limiting sales to avoid this situation again, Chinese consumers are searching for new ways and channels to purchase Alpecin products from abroad, not knowing if the products are real or fake. But there is no need for this, as the caffeine shampoo brand has already set up in China, back in April 2016. Alpecin launched the three best-selling products in over 2,000 Watsons stores in Shanghai, Beijing, Guangzhou, and more, and the brand has also initiated online distribution via the online platform Tmall. The brand pledges to its Chinese customers that all its products, whether sold in Germany or China, preserve the same quality standard. Alpecin, a product developed by the scientific research team of the German company Dr Wolff in the year 1930, is a product that prevents hereditary hair loss.

The world must wake up to the crucial role carbon capture and storage (CCS) is playing in decarbonising the future, the World Future Summit in Abu Dhabi was told. Industrial processes like UAE’s Al Reyadah CCS facility are proving that CCS is a comprehensive and commercially viable technology - and a lynchpin to meeting global climate goals. Speaking at the Summit, IEA Head of CCS Unit, Juho Lipponen, and Global CCS Institute Executive Adviser (Europe, Middle East and Africa), John Scowcroft, said the ability of CCS to reduce emissions across industry, was enormous. Lipponen asserted that the Al Reyadah CCS project, the world’s first iron and steel facility to install carbon capture and storage, was paving the way for other

industrial complexes - cement, fertilisers, and natural gas processing - to capture and store CO2 emissions. Scowcroft said as CO2 emissions from industrial sources continue to rise, it was clear that CCS was the most realistic carbon mitigation option for industrial processes if a well below two degrees Celsius target is to be achieved. The Al Reyadah CCS Project is a joint venture between Abu Dhabi National Oil Company (ADNOC) and Masdar, the renewable energy arm of the Abu Dhabi Government. With Al Reyadah, there are now 16 large-scale CCS projects operating globally across a range of applications with seven more poised to come onstream capturing over 30.85 Mtpa of CO2.

Sabre helps Emirates airline enhance traveller experience Sabre Corporation is supporting Emirates airline with industry-leading technology that personalises the travel experience for consumers by enabling them to easily purchase a range of customised fares. Sabre and Emirates have also signed a new long-term global distribution agreement to make the airline’s fares available to travel agents globally who use Sabre. Emirates operates more than 3,600 flights per week to over 150 destinations

across six continents. Sabre’s technology will enable the airline to effectively market and sell its expansive roster of fares globally through the Sabre Travel Marketplace, reaching more than 425,000 travel agents across the world. Travel agents using Sabre can now offer clients more informed choices and a higher level of customer service, while also driving upsell opportunities based on enhanced visibility to specific brand offerings.

FEBRUARY 2017 7

DP World Group Chairman and CEO Sultan Ahmed Bin Sulayem with World Food Programme Executive Director Ertharin Cousin at the World Economic Forum annual meeting in Davos, Switzerland. (Photo Credit: WFP/Jessica Andrews)

DP World joins UN-led partnership to support humanitarian disaster relief DP World has signed an MOU to provide pro bono expertise and resources to help the humanitarian community respond to major

DP World will team up with the initial LET partners Agility, Maersk and UPS, and will be called on by the Logistics Cluster, led by the United Nations’ World Food Programme to support immediate relief efforts in the aftermath of major natural disasters such as earthquakes, storms and

floods. This public-private partnership brings together the resources of the logistics industry and the emergency experience of the humanitarian community, ensuring effective and efficient response and ultimately contributing to saving lives, alleviating suffering and protecting dignity.

disasters, after joining leading logistics and transport companies to become part of the Logistics Emergency Teams (LET).

DP World signs MOU with Government of Kazakhstan DP World has signed a Memorandum of Understanding (MoU) with the Government of Kazakhstan for the development of a special economic zone in Aktau, further boosting trade and logistics in the country. The MoU was signed by DP World Group Chairman and CEO, Sultan Ahmed Bin Sulayem and Governor of Mangistau, Akim Alik Aidarbayev in the presence of First Deputy Prime Minister, Askar Mamin. It builds on DP World’s present management advisory services contract with the Port of Aktau, Kazakhstan’s main cargo and bulk terminal on the Caspian Sea. Both parties will be exploring

opportunities to work together on the Aktau SEZ development project, while adding shipping capacity on the Caspian Sea. The projects are part of Kazakhstan President Nazarbayev’s five-year economic policy, ‘Nurly Zhol’, focused on the development of transport and logistics, energy and industrial infrastructure, as well as of small and mediumsized businesses. The partnership also includes the development of a range of existing and new projects to support the Government of Kazakhstan’s efforts to attract private investment for its transport infrastructure, including the Port of Aktau.

DP World Group Chairman and CEO, Sultan Ahmed Bin Sulayem following the signing of the MoU with the Government of Kazakhstan for the development of a special economic zone in Aktau

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DP World Group Chairman and CEO, Sultan Ahmed Bin Sulayem with the Honourable Prime Minister of India Shri Narendra Modi at the 8th edition of the Vibrant Gujarat Global Summit held in Ahmedabad, India

DP World reaffirms commitment to India’s growth DP World Group Chairman and CEO, Sultan Ahmed Bin Sulayem met with the Honourable Prime Minister of India Shri Narendra Modi at the 8th edition of the Vibrant Gujarat Global Summit, held in Ahmedabad, India. Discussions highlighted the immense potential of India’s growing economy and the nation’s maritime and inland trade. New opportunities resulting from the Prime Minister’s programmes such as Invest India, Digital India, Skill India, and Made in India, were also on the agenda, evidence of the new economic direction of the country.

Bin Sulayem also joined a Global CEOs’meeting at the Summit chaired by the Prime Minister. He outlined the importance of the innovation and opportunities for investors in trade, logistics and the maritime sector. The conference hosted 35 foreign business leaders and 23 Indian industrialists. DP World is a market leader in Indian container terminal operations, with the largest portfolio of investments in ports along the Indian coastline. India and the UAE continue to have a long-lasting trading relationship, with bilateral trade reaching US$ 60 billion (AED 220386000000) in 2015.

Shell selected as exclusive supplier of RollsRoyce motor cars genuine engine oil Shell recently announced that it has been chosen by Rolls-Royce Motor Cars Ltd as the exclusive manufacturer and supplier of Rolls-Royce Motor Cars Genuine Engine Oil. From October 2016, this oil has started to become available to Rolls-Royce Motor Cars dealers around the world. The new passenger vehicle engine oil has been developed and rigorously tested to meet the latest RollsRoyce Motor Cars Ltd passenger vehicle engine specifications, and to work perfectly with their V12 engines. Shell PurePlus Technology, present in Rolls-Royce Motor Cars Genuine Engine Oil, helps protect the engine from powerrobbing deposits and sludge. In addition, its properties enable the oil to reach peak operating efficiency sooner in challenging conditions with low oil consumption and long engine service life.

Flynas orders 120 A320neo Aircraft Flynas, Saudi Arabia’s leading low-fare carrier, has signed an agreement with Airbus for 120 A320neo Family aircraft. The agreement, at list price worth SAR 32 billion (US$ 8.6 billion – AED 31.6 billion), which includes 80 firm orders, with deliveries scheduled during 2018-2026, with another 40 purchase rights, was announced by Ayed Al Jeaid, Chairman, NAS Holding, and Bander Al Mohanna,

Chief Executive Officer, NAS Holding Group. Flynas, an all Airbus operator, currently has 26 A320neos in service. Launched in 2007, the airline has successfully operated over 260,000 flights carrying more than 30 million passengers in the last ten years. To illustrate Flynas’ rapid growth, the airline set a new record, carrying over 6.3 million passengers in 2016, a 14 per cent year-on-year increase.

FEBRUARY 2017 9

The recipients of the 2016 RAK Free Zones Business Excellence Awards are:

RAK FTZ & RAKIA awards outstanding businesses in Ras Al Khaimah Excitement was in the air at the Rixos Bab Al Bahr, as Ras Al Khaimah Free Trade Zone (RAK FTZ) and Ras Al Khaimah Investment Authority (RAKIA) announced the winners of the first joint RAK Free Zones Business Excellence Awards last month. The awards programme lauded 10 outstanding companies that displayed relentless commitment to organisational excellence, and contributed immensely to strengthening Ras Al Khaimah’s socio-economic future.

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BEST NEW STARTUP - Salaty, a provider of prayer essentials for women and children BEST NEW TECHNOLOGY - Burkert Middle East, a manufacturer of measurement and control systems for liquid and gases BEST SMALL BUSINESS OF THE YEAR Stafford Associates, one of the oldest distance learning provider in the Middle East FASTEST GROWING COMPANY – SMALL - Synergy International, a technical resource engineering company FASTEST GROWING COMPANY – MEDIUM & LARGE - International Armoured Group, an armoured vehicle manufacturer with unparalleled safety and performance record BEST INDUSTRIAL COMPANY OF THE YEAR – SMALL SIZE - Spatial Composite Solutions, one of the global leaders in providing cabin crew training simulators

BEST INDUSTRIAL COMPANY OF THE YEAR – MEDIUM SIZE - Naturelle, a manufacturer of FMCG products for the various brands of Dabur International BEST INDUSTRIAL COMPANY OF THE YEAR – LARGE SIZE - ARC International Middle East, one of the leading producers of glass tableware products BEST CONTRIBUTOR TO RAS AL KHAIMAH DEVELOPMENT - Utico, the largest fullservice private utility in the Middle East BEST CORPORATE SOCIAL RESPONSIBILITY - Future College FZE, an academic infrastructure provider Runner-ups were also recognised during the ceremony, including: D Raama Clothing, Experio International, Kersten Middle East, Abiya Building Materials Trading, TAG Middle East, Global Processing, Ocean Rubber Factory, CORE, and Mahindra Emirates Vehicles Armouring. Award winners and runners-up were selected by an independent judging committee from IPE following a systematic assessment process.

Bahri announces results of ‘Ordinary General Assembly’ meeting Bahri announced the results of its Ordinary General Assembly meeting last month, at the Riyadh Marriott Hotel, Makarim Convention Center. The assembly outlined a number of key developments during the course of the meeting, including: Election of nine members for the Board of Directors for the next three-year term Selection of ‘Ernst & Young’ as an external auditor by the company’s Audit Committee Approval of project commissioning and decisions made by the current Board of Directors

Distribution of cash dividends amounting to SAR 984,375,000 (AED 964,098,902.81 – US$ 262,475,531.72) to shareholders; this amounts to SAR 2.5 (AED 2.45 – US$ 0.67) per share, and represents 25 per cent of the capital Bahri reported strong financial results for the year ending December 31, 2016, recording a net profit of SAR 1.76 billion (AED 1.72 billion – US$ 469 million). The company also registered net revenue of SAR 6.78 billion (AED 6.64 billion – US$ 1.8 billion), and EPS of SAR 4.48 (AED 4.39 – US$ 1.19) for the year.

SNC-Lavalin awarded five-year extension to GES+ contract with Saudi Aramco SNC-Lavalin has announced that SNCLavalin Fayez Engineering (SLFE) has been awarded a five-year extension to its existing General Engineering Services Plus (GES+) contract with Saudi Aramco, with three one-year options to extend. Under the contract, SNC-Lavalin will be invited to bid on front-end engineering, detailed engineering, and project management services to support the implementation of Saudi Aramco’s capital and sustaining capital programmes in the

Kingdom of Saudi Arabia. Projects will include onshore oil and gas production and processing facilities, building and infrastructure projects, as well as refining and petrochemical facilities. SLFE has completed over 200 projects under the GES+ initiative over the past five years, most of which were competitively bid in-Kingdom against other Saudi Aramco qualified GES+ contractors and executed out of SLFE’s head offices located in AlKhobar, Saudi Arabia.

FEBRUARY 2017 11

Future of Business Survey - Global Small businesses represent more than 90% of enterprises in all economies and also constitute a majority of a country’s employment virtually worldwide. Facebook, the OECD and the World Bank teamed up to create an online monthly survey of small businesses to understand their sentiment, activities, and challenges. Timely information about businesses provides a pulse on the current and future economic environments in which businesses operate, and gives insights on ways to help businesses grow. For more information, see www.futureofbusinesssurvey.org.

Current state, future outlook, confidence levels Current state of own business

Future outlook of own business

Business confidence levels 100 80 60 40 20 0 -20 -40 -60 -80 -100

10%

17% 44%

39%

31%

59%

Positive Neutral Negative

How would you evaluate the current state of your business?

What is your outlook for the next 6 months on your business?

Job growth Job growth past 6 months How did the number of employees in your business change   in the last 6 months?

75%

1 Show products/services

Provide information (e.g. opening hours, contact info)

64%

19%

On average, SMEs use online tools for

74%

Communicate with customers or suppliers

63%

15%

Job growth next 6 months And how do you expect the number of employees in your business to change in the next 6 months?

out of 6 of these purposes.

59% Manage internal business process (e.g. finances, comm. among employees)

Increase Decrease No change

66%

Sell products/services

40%

22%

Score calculated from questions about current situation and six-month outlook, normalized to range from -100 (all negative) to 100 (all positive)

Advertise to potential new customers

Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16 Dec 16

Use of online tools

53%

Increase Decrease No change

For which of the following do you use online tools or platforms?

Company size 12 %

Company age

Management gender

30%

5 % 34 %

14 %

1 2-4 5-9 10-49 50+

36 %

26%

19% 13%

13%

4-5 years

6-10 years

28%

<1 year

1-3 years

>10 years

How old is your company?

How many employees are there in your business?

Mainly female*

24% 48% Balanced

Mainly male*

How many people are in the top management of your company [female/male]? *“Mainly“ indicates that at least 65% of the management are female/male.

Top 5 challenges

74%

57%

49%

34%

33%

Attracting customers

Increasing revenue

Maintaining profitability

Developing new products/innovation

Uncertainty over economic conditions

What are the most important challenges your business currently faces?

International trade*

No. of export countries

Exports revenue

63%

16 %

18% < 25%

18%

25% - 49%

18 % 1 2-5 6-10 11+

12 %

10%

50% - 74%

75% +

54 %

What proportion of your revenue comes from international exports?

How many countries do you export to?

Inputs from abroad

Export to

55% Engaged in international trade

19% < 25%

Is your company engaged in international trade?

25% - 49%

11% 50% - 74%

15% 75% +

What percentage of your inputs do you source directly abroad?

Source: Monthly survey of SME page owners on Facebook | Sample December 2016: N = 13.563 | Total sample since February 2016: N = 141.785 *Combined results October - December 2016: N = 38.153

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32%

Individual consumers And do you export to…?

28% 40%

Businesses

Both

Facebook focuses on small businesses with new Future of Business Survey In collaboration with the World Bank and Organisation for Economic Co-operation and Development (OECD), Facebook has launched the Future of Business Survey, a new global source of information on small and medium-sized enterprises (SMEs). The survey, which covers more than 140,000 small businesses, in 33 countries around the world, provides information to help businesses learn from each other and to encourage them to use technology to further their reach. This year’s results focus primarily on Gender Management – gender equality in business should be a priority in every part of the world. According to the survey, although barriers to starting a business in some countries are significant, when women circumvent them, they are equally confident about the present and near-term outlooks of their businesses as are men. With more businesses leveraging online tools each day, the survey also provides a lens into a mobilised and digital economy and unique insights into businesses’ outlooks, challenges, tactics, and demographics. Small businesses drive economic growth and are responsible for the vast majority of jobs in economies around the world, through adopting digital tools that decrease the barriers to entry into the international economy. Connections between people around the world have reached unprecedented levels - it’s no surprise that this flexibility and reach inspires confidence and growth. Currently, there are now over 60 million small business Pages on Facebook and globally, more than one billion people on Facebook are connected to at least one business in a foreign country. In conjunction with the survey, a custom Blueprint course - Facebook’s global training and certification programme, will be launched to highlight how to get the most out of the Future of Business survey

PepsiCo highlights the importance of partnerships, innovation in water management at the International Water Summit in the UAE Yokogawa receives EPMS and SCADA order Yokogawa Electric Corporation announced that its subsidiary, Yokogawa United Kingdom Ltd, has received an order from the British Pipeline Agency Limited (BPA), the UK’s leading provider of engineering and operational services to the oil and gas pipeline sector, to supply a management and control system for a major multi-product fuel pipeline system. This project will replace BPA’s existing pipeline management and supervisory control and data acquisition (SCADA) systems. The pipeline system consists of three integrated multi-product fuel pipelines that, altogether, are some 650 kilometres in length, and extend from Ellesmere port in Northwestern England to the country’s Southeastern coast. The pipelines connect to the City of London’s major airports, and are a critical part of the UK’s infrastructure, This order is for Yokogawa’s Enterprise Pipeline Management Solution (EPMS), which will manage functions such as delivery scheduling and oil storage, and the FAST/TOOLS SCADA software, which will monitor and control the oil pipelines and related equipment such as compressors. Yokogawa United Kingdom Ltd. will be responsible for the engineering, installation, and commissioning of these systems. Delivery of these systems will be completed by March 2018.

PepsiCo, as partner of the International Water Summit (IWS), highlighted the company’s commitment to responsible water stewardship in the Asia, Middle East and North Africa (AMENA) region and across the world. The IWS is a platform that promotes water sustainability in arid regions, bringing together global leaders, experts, academics and business innovators to speed the development of new technologies and strategies for sound water stewardship. Countries, especially in water-stressed regions, are realising that demand caused by population growth is increasing pressure on

scarce water resources. Gains in efficiency and productivity in water management and use are helping to reduce the risk of severe water shortages. According to a new report called ‘The Future’, authored by strategy consultants Booz Allen Hamilton, 25 countries will lack sufficient access to water to meet daily needs by 2025, leaving almost half the world’s population without adequate access to water. According to the Water Resources Institute, a global research organisation that works closely with leaders to sustain the world’s natural resources— 14 of the world’s 33 likely most water-stressed countries in 2040 will be in the Middle East.

Partnership strategy a core element of Etihad growth, says Group President and CEO Etihad Aviation Group’s partnership strategy has been a core element of the growth of the business, said President and Chief Executive Officer James Hogan. Delivering a keynote at the 19th Annual Global Airfinance Conference in Dublin, Hogan said the strategy, which resulted in 5.5 million guests connecting onto the Etihad Airways network from codeshares and partners in 2016, had delivered revenue and synergy benefits. “Our investments had an immediate impact on the revenue side, delivering hundreds of millions of dollars in additional revenues and allowing us to fill our onward connecting flights. Those benefits have been replicated in all our minority investments – in airberlin, Alitalia, Jet Airways, Virgin Australia, Air Serbia, Air Seychelles and Etihad Regional. We also believed our minority investments would unlock an additional advantage that the global alliances were simply unable to use,”he added. Hogan said the third goal of the equity investments, to allow the management of these airlines to reshape their businesses into sustainable profitable operations, required a longerterm view.“Etihad Aviation Group is now a solid, diversified business with strength in depth – and with the scale to shape its destiny in the future,”he added.

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Honeywell Middle East introduces â&#x20AC;&#x2DC;Fit and Forgetâ&#x20AC;&#x2122; Honeywell announced the introduction of the BW Clip4 to the Middle East, a new four-gas, portable monitor that once turned on, can operate continuously for two years without the need to change sensors or charge batteries, helping customers boost safety compliance and reduce maintenance costs. With safety and sustainability a priority of

14 FEBRUARY 2017

regional government agendas, the non-charging BW Clip4 is an energy efficient life-saving gas detecting technology, suitable for a wide range of industries, including oil and gas, wastewater management, manufacturing, construction, pharmaceuticals, and other applications. The BW Clip4 is cheaper to own and operate than other solutions on the market,

and the technology significantly reduces maintenance costs that are usually associated with fleets of portable gas detectors by eliminating repair work and the need to stock additional sensors and spare units. Because it is always on, the BW Clip4 helps drive safety compliance by assuring that workers wearing the device are always protected.

Expo 2020 Dubai revealed full details of its sustainability strategy – a key pillar in the planning of the first World Expo to be held in the Middle East, Africa and South Asia – at the Abu Dhabi Sustainability Week (ADSW). Sustainability will be among the main focuses of the World Expo and the legacy it wants to leave behind for the UAE, the region, and the wider world. Included in Expo 2020 Dubai’s exhibition stand at ADSW are plans for its Sustainability Pavilion, which is envisioned by Expo 2020 as an inspiration for a new generation of guardians of the earth’s welfare as well as an example of sustainability in action. The Sustainability Pavilion is planned to take much of its energy and water needs from the sun and the atmosphere, and will be a tangible testament to the focus and progress made in the field of sustainability in the UAE. Expo 2020 Dubai has said that, in particular, it wishes to focus on making an impact on the thinking and actions of the young, who will be the future guardians of the planet.

UNICEF works with local governments and communities to ensure children get the best start in the first 1,000 days of life.

Dubai ranks among the world’s fastest changing and most dynamic cities London (6th) in the Europe, Middle East and Africa (EMEA) market. Top of the list went to the Indian powerhouse Bangalore, followed by Ho Chi Minh City, Silicon Valley, Shanghai, and Hyderabad, which completed the top five. Despite challenges and a world of heightened risk, the 2017 edition of JLL’s CMI highlights remarkable dynamism in major global cities, many of which are consistently outperforming their national economies.

Dubai is among the most dynamic cities in the world, according to JLL’s City Momentum Index (CMI) 2017 report. The annual CMI report looks at the fastestchanging cities around the globe, tracking the speed of their changing economy and commercial real estate market, whilst identifying hubs that have the most dynamic attributes over the short and long-term. Placed at 11 in the global top 30, Dubai finished just behind Nairobi (10th) and

Cebu Pacific ramps up collection efforts to reach four million malnourished children Cebu Pacific has strengthened its partnership with the United Nations Children’s Fund (UNICEF) to reach millions of undernourished children in the country. The endeavour is part of the global organisation’s Change for Good programme, which accepts contributions from passengers on board flights of partner airlines.

UNICEF Philippines/JReyna

Expo 2020 Dubai rolls out detailed planning for sustainability

Proceeds contribute to the UN children’s agency’s First 1,000 Days campaign, which provides optimal nutrition, from a mother’s pregnancy to a child’s second year of life. Since July 1, 2016, CEB began accepting contributions of all currencies from passengers. The contributions are being used to fund nutritional supplements distributed to poor households with pregnant mothers or malnourished children. A portion of the funds also support barangay-level information drives on nutrition in UNICEF’s focus areas in Northern Samar, Zamboanga, and Maguindanao. In the Philippines, around four million Filipino children are ‘stunted’. These children are undernourished, causing irreversible damage to their health, physical growth and brain development. Change for Good targets these children by cashing in donations for lifesaving materials and services for vulnerable children in more than 150 countries.

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COUNTRY REPORT - BAHRAIN

Bahrain Fort in Kingdom of Bahrain, Manama city

16 FEBUARY 2017

The name Bahrain means “two seas” in Arabic. It is unclear what the term specifically refers to, and for much of its history, Bahrain was the name for the eastern coast of Arabia. Only recently has it come to identify the islands of the Awal archipelago. This Oxford Business Group’s report on the country’s overview and a review of the year 2016 throws light on the country’s increasing prominence in the Middle East region

he island’s first notable inhabitants were of the Dilmun civilisation, approximately 6000 years ago, but its geographically strategic location has attracted the attention of numerous empires over the centuries, including the Persians, Sumerians, Assyrians, Babylonians, Arabs, Portuguese and the British. As a commercial centre during the period of ancient Mesopotamia, its key location for facilitating trans-Gulf trade attracted merchants and imperial administrations for millennia to come.

Economic overview Bahrain pioneered the Middle East’s oil production in 1932, thus establishing the

FEBRUARY 2017 17

COUNTRY REPORT - BAHRAIN

Bahrain pioneered the Middle East’s oil production in 1932, thus establishing the region’s initial framework for the petroleum industry. The new resource enabled Bahrain to modernise its economy by moving beyond traditional industries such as pearl diving and ﬁshing

Bahrain World Trade Center Skyscraper and other tall high rise buildings in Manama City.

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region’s initial framework for the petroleum industry. The new resource enabled Bahrain to modernise its economy by moving beyond traditional industries such as pearl diving and fishing. However, the kingdom sought to diversify its economy at an early stage and consequently established itself as a leading regional financial centre. Its highly regarded regulatory system

encouraged various regional banks looking to move their capital out of Lebanon during that country’s civil war to set up shop there. Today, the country’s national plan, Bahrain Economic Vision 2030, aims to enhance private sector growth while the government invests in infrastructure, affordable housing and human resources.

COUNTRY REPORT - BAHRAIN

The kingdom maintains a developed industrial sector and hosts one of the world’s largest aluminium smelters, Aluminium Bahrain (Alba), with downstream businesses creating products for export. Other industries in Bahrain include downstream oil and gas products as well as a growing food industry, serving both the Saudi

market and the global economy. According to the World Bank’s 2016 “Doing Business” report, the country ranks 66th in the world for the ease of doing business and 8th for paying taxes, with its 2014 GDP recorded at US$33.87bn. In the World Economic Forum’s 2015-16 “Global Competitiveness Index”, the kingdom ranks 39th globally, mainly thanks

to its strong institutions, infrastructure and market efficiencies. Bahrain’s model of development has been studied and formalised by the UN Industrial Development Organisation (UNIDO), in partnership with the Arab Regional Centre for Entrepreneurship and Investment Training based in Manama. The

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COUNTRY REPORT - BAHRAIN

UNIDO Entrepreneurship Development and Investment Promotion programme, developed in Bahrain, has been applied, with UNIDO support, in 42 developing countries around the world with strong results.

Government Bahrain gained independence from the British government in 1971. The kingdom has been ruled as a constitutional monarchy since 2002 under the leadership of King Hamad bin Isa Al Khalifa, who is the country’s current ruler. King Hamad came to power in 1999, following the passing of his father, Sheikh Isa bin Salman Al Khalifa, whose rule began in 1961. Sheikh Khalifa bin Salman Al Khalifa, the prime minister, has served as head of government since 1971. The crown prince, Sheikh Salman bin Hamad Al Khalifa, is the deputy supreme commander of the Bahrain Defence Force, first deputy prime minister and chairman of the

Economic development board Executive authority is entrusted with the king and his appointed Council of Ministers. In 2001, the king initiated a number of reforms articulated in the National Action Charter. A bicameral legislature, known as the National Assembly, was re-established after its suspension in 1975. The assembly consists of a 40-seat lower house (the Council of Representatives), whose members are elected to four-year terms, and a 40-seat upper house (the Consultative or“Shura”Council), whose members are appointed by the king. The Shura Council has veto power over the lower

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house. The latest parliamentary elections took place in November 2014 and thought met with boycotts by the Al Wefaq party, still garnered over 52 per cent voter turnout. Six women were elected to the 40-member lower house of parliament, the most since elections began in the kingdom.

Politics Following a wave of protests throughout the Arab world in 2011, civil unrest reached its height in Bahrain during February and March of the same year. The demonstrations related to grievances surrounding the country’s democratisation process. By mid-March 2011, the kingdom received GCC security assistance in order to uphold political stability, and the country’s businesses managed to maintain positive growth in the following years. As a result of a national dialogue with the aggrieved parties, the king authorised the Bahrain Independent Commission of Inquiry (BICI) to investigate the crisis and develop recommendations moving forward. The final report highlighted various instances of police brutality and demonstrator violence during the unrest and provided recommendations for political reform. As of late 2015, the government remains under pressure from the opposition party and the international community regarding the implementation of the BICI report recommendations.

Financial services Bahrain’s rise to prominence as the region’s key financial centre occurred during the 1970s. The banking sector benefited significantly as a result of the kingdom’s economic diversification programme, and Bahrain is highly regarded for its regulatory framework under the direction of the Central Bank of Bahrain (CBB). According to the CBB, there were 403 financial institutions in the country as of June 2015, and the sector contributes around 25 per cent of overall GDP. Some 66 per cent of employees in the financial sector are Bahraini nationals.

Islamic finance The kingdom is home to the highest number of Islamic financial institutions in the Middle East as of December 2015, according to the ICD-Thomson Reuters Islamic Finance Development Indicator report. The kingdom also plays host to a number of regulatory institutions that provide international standards for the sector, such as the Accounting and Auditing Organisation for Islamic Financial Institutions, the International Islamic Financial Market, the Islamic International Rating Agency, and the General Council for Islamic Banks and Institutions. The kingdom regularly issues sukuk (Islamic bonds) that are met with full subscription rates, as do other Bahraini institutions. The kingdom is also home to seven takaful (Islamic insurance) companies.

Energy The energy sector is a pillar of Bahrain’s economy, accounting for the majority of government revenue but a shrinking proportion of GDP. Upstream recovery technology has enabled Bahrain to increase its oil production rate to over 58,000 barrels per day (bpd) in 2015, up from 48,000 bpd in 2013, and the government’s target is to reach 100,000 bpd by 2017. Presently, the country refines around 260,000 bpd, with the majority of crude coming in from the Abu Safa field, which the country shares with Saudi Arabia. Gas production is also expected to increase from 1.5bn to 2.7bn cu feet per day in the same time-frame. A new pipeline

COUNTRY REPORT - BAHRAIN

with a capacity to transfer 350,000 bpd from Saudi Arabia to a Bahraini refinery is expected to be operational by 2018, replacing an ageing 230,000 bpd pipeline.

Transport The island’s geographic location is a key strategic asset, enabling it to serve as a transportation hub for the region. The Khalifa Bin Salman Port has enhanced the country’s role as a primary supplier of goods to Saudi Arabia, the region’s largest market. Bahrain is linked to Saudi Arabia via the 25-km King Fahd Causeway, which may soon be expanded to handle increased traffic by trucks, commuters and tourists. Additionally, the Bahrain International Airport is in the midst of an extensive expansion and modernisation programme, which is expected to further improve the country’s status as a centre for global trans-shipment and logistics.

Tourism Due to its vibrant history, rich culture and diverse population, Bahrain attracts a large number of tourists, particularly from other GCC states. In 2012, the Arab League named Manama the Capital of Arab Culture, and the kingdom hosted a wide array of events relating to Arabic art, music, architecture and literature. Manama was also designated as the Capital of Arab Tourism for 2013, boosting the industry after a decline in tourism numbers following political unrest in 2011. The Formula 1 Grand Prix remains a significant driver of annual tourism revenue. Bahrain is also investing in infrastructure to support the meetings, incentives, conferences and exhibitions segment. Bahrain’s Ministry of Tourism was absorbed by the Ministry of Industry and Commerce in order to push development in the sector further ahead.

Geography Due to land reclamation projects, the country has increased its overall landmass to more than 765 sq km, up from its original size of 665 sq km. The total archipelago consists of 33 islands and rests off the eastern shores of the Arabian Peninsula. The four predominant islands include Bahrain Island (accounting for 76 per cent of the total landmass), Al Muharraq Island, Sitra Island

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Poster with the King of Bahrain Hamad bin Isa Al Khalifa on the street in Manama, the capital of Bahrain

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Pottery market in A’Ali, Bahrain

and Umm An Nasan Island, which are all interconnected by causeways. Bahrain Island is also connected to Saudi Arabia via the 25-km King Fahd Causeway. Plans are in the works for a new 40-km causeway to Qatar, the kingdom’s second-closest neighbour, which would be the world’s longest fixed link. Al Manama, the capital city, sits at the northernmost part of Bahrain Island and is the country’s most populous city. Other major cities include Riffa, Muharraq, Isa Town and Sitra. The Bahrain International Airport is located in Muharraq. Jebel Al Dukhan is the kingdom’s highest point, at 122 metres, while the majority of the landmass consists of low-lying desert. Less than 3 per cent of land is arable, and the primary agrarian area is situated on a 5-km strip on Bahrain’s northern coast, which produces dates, almonds, figs and pomegranates.

Natural resources The country’s primary natural resources include oil, gas, fish and pearls. The traditional industries of fishing and pearl diving have diminished substantially since Bahrain began

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oil production but remain culturally significant. Although the kingdom was the first GCC state to discover oil, it has smaller petroleum reserves than its neighbours. Water is another finite local resource for the kingdom, and the island’s primary aquifer is becoming salinised due to overuse. Bahrain now depends on desalination for approximately 90 per cent of its potable water, as fresh water sources are scarce.

Education Bahrain was the first Gulf state to initiate public school education – for boys in 1919 and for girls in 1928. Since then, Bahrain has invested heavily in education, and the government currently spends approximately 11-12 per cent of its budget on education development. Bahrain’s literacy rate is secondhighest in Arab world at 94.6 per cent. In line with Bahrain’s Economic Vision 2030, the government launched the Quality Assurance Authority for Education and Training to develop and implement standards for institutions. Mandatory contributions to Tamkeen (the state agency charged

with development) paid by companies for each expatriate worker they are invested in Bahrain’s education and training system to cultivate a competitive local workforce. On the government side, the Bahrain Institute of Public Administration is a body that focuses on improving the ability of public administrators both in technical and in soft skills, focusing on sharing knowledge by both bringing in outside experts and offering its services to foreign governments across the GCC.

Health care As has been the case in some other sectors, Bahrain has historically led the GCC in healthcare. The American Mission Hospital (AMH), established in 1902, is the region’s oldest. Bahrain created its Ministry of Health in 1973 modelling its policies on the operations of AMH, and the government subsidises health care costs for all citizens. The Supreme Council of Health is currently streamlining an e-Health initiative with the overall objective of linking hospitals across the country to a central data-bank of medical records, which will reduce costs.

COUNTRY REPORT - BAHRAIN

Bahrain Year in Review 2016

on-oil activity, which accounts for 80 per cent of GDP, expanded by 2.7 per cent year-on-year (y-o-y) in the first quarter of the year and 3.6 per cent in the second, according to the latest quarterly report from the Bahrain Economic Development Board (EDB). The EDB also listed social and personal services, construction and financial services as the fastest growing sectors in the second quarter. Weaker performance in the hydrocarbons sector – which contracted 1.7 per cent in the second quarter after expanding 4.5 per cent in the first three months – was reflected in a slight cooling of GDP growth to 2.8 per cent by year end, down on the 2.9 per cent posted in 2015. Looking ahead, the EDB forecasts economic output will increase by 2 per cent in each of the next two years, driven mainly by non-oil growth, which is expected to hit 2.4 per cent in 2017 and 2.3 per cent the following year.

Varied projections The IMF was marginally less optimistic about the kingdom’s growth prospects for 2016 and the medium term. According to the IMF’s “World Economic Outlook” report released at the end of October, Bahrain’s economy will close out the year with GDP growth of 2.1 per cent, which is expected to slow to 1.8 per cent and 1.6 per cent in 2017 and 2018, respectively. Even with government measures to boost revenue, the IMF estimates state debt will rise by 24 per cent to BD8.99bn (US$23.9bn) – or 75 per cent of GDP – by the end of this year, partly due to increased spending on infrastructure and development programmes.

Debt levels are expected to continue to rise through to the end of the decade, according to the IMF, hitting BD10.5bn (US$27.9bn) in 2017 and BD14.2bn (US$32.7bn) by 2020.

Bahrain, lowering both its long-term foreign currency and local currency default ratings from“BBB”to“BB+”.

Ratings under review

The second half of 2016 saw inflation begin to moderate, having reached 3.8 per cent in April – the highest level since December 2013. In August consumer price inflation fell to 2.6 per cent y-o-y, reflecting lower food and non-alcoholic beverage prices, though housing and utilities costs – which account for 24 per cent of Bahrain’s inflationary basket – rose by an annualised 3.8 per cent. IMF projections put consumer price inflation for the year at 3.6 per cent, dropping slightly to 3 per cent in 2017.

While some aspects of the economy are performing strongly and growth remains solid, international ratings agencies sounded notes of caution and lowered Bahrain’s ratings in the first half of the year. In mid-February ratings agency Standard & Poor’s (S&P) cut Bahrain’s rating by two levels, from“BBB-”to“BB”, affirming its stable outlook for the kingdom. While noting the government was implementing reforms aimed at shoring up the kingdom’s fiscal position – including curbing spending and working to reduce debt levels – the S&P report said the impact of low energy prices would continue to strain Bahrain’s debt metrics. Among the reforms to reduce expenditure and improve the state’s balance sheets were reductions in petrol and gas subsidies introduced in January. Government estimates put the savings to the budget through subsidy reductions and spending cuts at US$1.6bn by 2019, while a planned goods and service tax should also bolster state coffers. Moody’s also moved to downgrade Bahrain’s rating in the first quarter, when it lowered its long-term issuer grading from“Baa3”to“Ba1”, designating a negative outlook. The agency also highlighted that a further downgrade was possible in the event of instability in the domestic or regional political environment, or if state measures to limit exposure to debt and risk proved unsuccessful. Later in June Fitch revised its position on

Inflation eases

Tapping the bond markets Part of the budgetary gap was closed with a US$2bn bond offer launched in October, which drew high levels of interest, being oversubscribed by a factor of 3.5. The offer was split equally between a 12-year conventional bond and a seven-year sukuk (Islamic bond), with the former to yield at 7 per cent and the latter priced at 5.6 per cent. Bahrain had already tested the bond market earlier in the year, raising US$600m in February through five- and 10-year bond retaps and a further US$435m via a privately placed sukuk in May. In November there was media speculation that Bahrain would again look to the international bond market early in the new year, though on November 17 the central bank issued a statement saying it had no current plans to issue further conventional or Islamic bonds. -www.oxfordbusinessgroup.com

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COVER - QATAR AIRWAYS CARGO

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limbing 10 places to number three in 2016 for cargo volumes carried, the pioneering of IATA Cargo’s XML messaging, enhancing cargo freighter destinations, and more, Qatar Airways Cargo (QAC) has seen a record growth year in 2016. “We achieved phenomenal growth through a combination of fleet and network expansion, innovation in our technology, creative interline agreements, and by deploying capacity on expanding untapped markets. We cannot forget the dedication and hard work put in by every staff in the company, who are the foundation of our outstanding performance, and of course, the support and trust of our valued customers,” states

Ulrich Ogiermann, Chief Officer Cargo, Qatar Airways Cargo. Customer first and service excellence is the key to sustainable growth, according to Ogiermann. He intends to continue to focus on the successive launch and enhancement of their new products, such as QR Mail, addressing the rising e-commerce segment, and QR Express, offering industry-leading rapid delivery for time-critical shipments. QAC expects to outperform the market by strategically placing capacity in the right areas, and offering the right combination of cargo products to the right destinations. Ogiermann is optimistic about the opportunities in the air cargo market, and forecasts a significant growth in the air cargo

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COVER - QATAR AIRWAYS CARGO

We cannot forget the dedication and hard work put in by every staff in the company, who are the foundation of our outstanding performance, and of course, the support and trust of our valued customers.

business this year. Their location, at the crossroads between East and West, gives them a distinct advantage, as, from their state-of-the-art, fully automated cargo hub at Hamad International Airport in Doha, they can reach approximately 80 per cent of the world’s population within six hours.“Which means we are strategically located within the world’s key trade markets,”he states. At QAC, the emphasis is on achieving high quality and consistency of handling in terms of safety, security, quality, and operational delivery across the globe.“Our customer proposition, called ‘The 3 Rs’, ie, rates, reliability, and relationship, is at the very heart of our business. Every QAC employee focuses on contributing to these

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strategic pillars, corresponding to their areas of responsibilities, roles and expertise. We remain highly supportive and creative when providing our customers with specialised air freight solutions to meet their needs. It is imperative for us to build trust and long-term business relationship with our customers through our sincerity and commitments as their preferred service provider,”says Ogiermann. Investing in other regional carriers such as Latam, Royal Air Maroc, Meridiana, and enhancing their stake in IAG, is one of QAC’s many strategic investments on behalf of the Group; their partnerships with other airlines to extend the network into areas such as Africa, intra-Europe, and North America, are based on market demand. Qatar Airways

Group will issue its annual financial report for the financial year 2016-17 in May, which will give a clearer picture of their financials. South America is one region that is gaining importance. Having identified a burgeoning import and export market for perishables and pharmaceuticals, QAC’s specialised air freight products, QR Fresh and QR Pharma, are the perfect fit for businesses in the continent, and provide customers the quickest way to transport their products globally.“On February 2, 2017, we will commence freighters to and from Sao Paulo, Buenos Aires, and Quito (subject to governmental approval). We will also expand our freighter operations in the United States with scheduled services to Miami. With the

Modern Freight Company steps into its 40th Year

hen you look at Dubai today, it’s difficult to appreciate the magnitude of change this Emirate (and indeed, the UAE as a whole) has undergone since the 70’s. But it was a very different place then and that era belonged to brave and faithful pioneers. This is where the journey for Modern Freight Company [MFC] began, from a small office, located in Bur Dubai. In its first year of inception, MFC was appointed as Agent for APL. Despite the colossal changes in technology and infrastructure, the core job of a Ship Agent was similar then as it is now, looking after the crew, vessel, port operations, equipment and cargo release. The award of such a premium ship agency was pivotal – it provided stability within the company and prestige to what was then a new entity – MFC. But this was only the beginning. MFC rapidly expanded it business and range of services to include Customs Clearance & Transportation, followed a few years later by a full range of Freight Forwarding Services. Geographic expansion accompanied the product growth, with the establishment of MFC in Qatar. A growing presence within the LCL business led to the rental of MFC’s first Warehousing – a large facility of 8,000m2, strategically located within Port Rashid. In time, this opened the door for other warehousing opportunities. Diversification and entrepreneurship have been central to MFC’s longevity and success.

Back in 1977, five ambitious men started something. 40 years on, we can begin to appreciate just how big that something was and just how visionary those men were. Welcome to Modern Freight Company.

Not content with establishing itself as one of the top Logistics Companies within the UAE, MFC created a manufacturing division – MFC Concepts. In its formative years, MFC Concepts was largely a shipping container repair depot. But since then, it has evolved into something much more and now proudly pushed the boundaries

of innovation in container conversions – from blast proof accommodation units, to mobile data server rooms, right the way through to DNV offshore containers. MFC Concepts can help design and build almost any kind of container conversion that can be conceived. Have you ever seen Dubai’s BOXPARK? This innovative retail hub comprised of 220 recycled shipping containers has achieved iconic status… and was built by MFC Concepts. Today, MFC is one of the largest Logistics companies in the UAE with offices in Jebel Ali, Sharjah, Abu Dhabi, Dubai Airport and Jebel Ali Industrial Area (in addition to Qatar). Supported by four warehouse facilities, MFC boasts more than 50,000 pallet positions, 600m2 of temperature controlled storage, 350m2 temperature controlled repack/VAS area, a dedicated chemical storage area and around 15,000m2 of laydown area. On the back of continued strong performance, MFC has plans underway to expand its main facility by another 20,000 pallet positions. As MFC enters its 40th year, the entrepreneurial spirit and sense of adventure remain as strong as ever, making the future bright and exciting. To all our customers, partners and suppliers – we thank you for your support in helping us to achieve this milestone. We couldn’t have done it without you!

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addition of these new destinations, our total Practice’, and is also compliant with ‘IATA freighter network in Americas increases to 12. Chapter 17’ standards for perishables.“We Departing Doha on Thursdays and Sundays, are confident that the rise of exports in the freighters connect through Luxembourg, America’s international trade during 2016 the cargo carrier’s European hub, before will continue to drive the demand for cargo arriving into the four new destinations. services,” states an optimistic Ogiermann. These new freighter services aim to meet When QAC was looking for software the growing demand for import and export solutions, they didn’t find anything off-thetrade in the region and will shelf to suit their needs and supplement the belly-hold keep up with the exponential Having identified growth they had embarked cargo capacity on Qatar Airways daily flights to Sao upon. So they decided to a burgeoning Paulo, Buenos Aires, and develop the CROAMIS import and Miami,” he explains. software in house, as a With the new venture with global IT export market for joint destinations, QAC is company Wipro. able to offer businesses “It was a 250-man year perishables and in the continent 200 effort, which was completed pharmaceuticals, in two and a half years. We tonnes of weekly cargo capacity, a young and QAC’s specialised had the expertise, and a clear modern fleet, and access vision of what we wanted air freight to the cargo carrier’s global from a cargo solution,” network of more than explains Ogiermann. products, QR 150 destinations via Doha CROAMIS or Cargo Fresh and QR hub. The cargo facility Reservations Operations at Hamad International Accounting Management Pharma, are the Airport operates in Information Systems is perfect fit for accordance with the highest developed as an end-to-end Pharmaceutical Industry businesses in the system, and designed from a Standards, compliant pure air cargo point of view. continent. with ‘Good Distribution It is an integrated system

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that enables comprehensive automation of the airline’s core business functions, and supports collaborative operations across the airline’s cargo supply chain. The system incorporates the latest practices in business functions, including sales, pricing, cargo ground handling, and ULD Management. CROAMIS also provides an integrated revenue management module for inventory management, cargo load, and revenue optimisation, and includes a robust cargo revenue accounting suite. It has been developed using platform-independent, state-of-the-art technologies, which facilitates modular deployment, and is also cloud ready. “We are starting to market and offer this product to others in the industry as well, and we have had incredible feedback, he smiles. QAC’s development, integration, and implementation of IATA’s XML messaging within CROAMIS has been very interesting. Qatar Airways, being the first airline to fully adopt and integrate the next generation messaging standard, had the opportunity for learnings as well. Post development of the capability, three of their customers implemented complete XML message exchanges with them, and they expect a few other customers to implement the messaging standard later this year. “Given the wider scope of the XML language, we have also implemented these standards with major customs authorities, including the Customs Department in our home base, Doha,”says Ogiermann, adding, “All this happened over the last one year, and we have now seen and reaped the benefits. This has a positive effect, leading to improved data quality and faster e-AWB implementation. Our customers are happy with the technical developments, and our intent of going for complete electronic transactions is well appreciated, which actually eases the way we do business, makes us the preferred choice of air freight service provider amongst our customers, and essentially contributes to our business growth.” QAC already has a global network of over 150 destinations, including more than 50 freighter destinations. Due to its fleet size, global network, and the fact that they have many frequencies from most of the distribution hubs, such as Hong Kong, Singapore, Bangkok, to name a few, via Doha, to the world with

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The combination of efficient belly space, plus freighters where we can flexibly adjust to the needs of the cargo business, is the most ideal and costefficient combination we have

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short and efficient connection times, they are fully capable to serve the booming e-commerce related business flexibly.“With QAC, customers and shippers have access to the key technology and fashion markets, which are driving the growth in e-commerce. Our fully automated hub is highly efficient, and we have special processes and teams in place to handle the most time-sensitive freight,” explains Ogiermann. For time-sensitive e-commerce shipments, QAC has a suite of premium cargo services, and is able to provide customers with the shortest transit times by offering tail-to-tail connections at their Doha hub.“We can minimise the time e-commerce shipments spend on the ground by providing customers with a 90-minute transit time at our Doha

hub. Our fleet strategy of effectively utilising freighters and belly space on passenger aircraft enables us to offer impressive tonnage capacity, high frequency, and a global network,”he clarifies. Postal e-commerce has been booming in recent years, and to cater to this growing segment of the business, QAC is making huge investments in automation and other areas to speed up the hub transit times for mail shipments. An example would be the implementation of electronic data interchange CARDIT/RESDIT with all postal customers. A dedicated mail and express handling facility is being built at the airside, thereby reducing ground transportation time at their hub. As business gets better, the fleet needs to keep up with the demand. Keeping this in

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mind, network and fleet expansion remains QAC’s key focus this year. The airline has recently made the announcement of 15 new passenger gateways for 2017-18, in tandem with the extensive deliveries of A350s, B777s, and A380s passenger aircraft. “On the freighter front, we will receive two B777 freighters in 2017, taking our total fleet count to 22. The combination of efficient belly space, plus freighters where we can flexibly adjust to the needs of the cargo business, is the most ideal and cost-efficient combination we have. We anticipate a significant upsurge in both belly hold and freighter capacity in months to come,” he adds. Economists expect global GDP to double by 2030, driven by emerging markets, bilateral trade relationships, as well as trade between

developed and emerging economies. This will definitely benefit the logistics industry, and one will see a corresponding increase in cargo in the coming years. Mergers and acquisitions are also positively shaping the future of air cargo traffic. “To match our growing capacity with the quality of our products and services, we will continue to work with our key stakeholders, such as IATA, and other regulatory authorities, to ensure dedicated compliance and adoption of advanced business processes, technology, and operation procedures. Our aim is to uphold our top three position on IATA’s Cargo iQ quality and e-AWB volume rankings in the next quarters,”states Ogiermann. Investing in the future, QAC is developing an advanced Climate Control Centre,

in response to growing global demand in specialised air freight solutions for temperature-sensitive products. The new 2,471 sq metre facility is expected to be commissioned in early 2017. They will also activate an industry-leading, temperaturecontrolled ramp handling system, including temperature and location visibility on ramp. “A three-year project, building our second cargo terminal at HIA, underlines our commitment to enhancing our capacity, capability, and efficiency. We anticipate a significant upsurge in both belly hold and freighter capacity in the near future. With our investments in qualified staff, a flexible freighter fleet, a well-planned network, and visionary management, the outlook for 2017 and beyond is positive,”he concludes.

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ENERGY

July 2015 marked a watershed moment in the Arab Gulf’s decades-long history of cheap oil, as the UAE became the region’s first country to remove subsidies for transport fuel. This Oxford Business Group’s comprehensive report on the regulation of the fuel price which now is a better reﬂection of the international market has more details

bu Dhabi-based daily The National reported on July 28, 2015 that prices for 95-octane unleaded petrol rose overnight from Dh1.72 ($0.47) per litre to Dh2.14 ($0.58), as the Ministry of Energy (MoE) switched to a pricing model that more closely reﬂects the global market. While the move was variously described as both a deregulation of prices and a removal of subsidies, in reality things are a little more complicated. The new system will remain regulated, as prices will be set by an official committee that meets on the 28th day of each month. The committee, which is chaired by the undersecretary of the MoE, includes the undersecretary of the Ministry of Finance, the CEO of ADNOC Distribution and the CEO of Emirates National Oil Company. It is charged with reviewing fuel prices against international benchmarks, before adding transportation, operation and distribution costs to arrive at the monthly price.

A mixed bag Thus, the new system cannot be described as entirely deregulated. Equally, some might consider it misleading to describe the previous system as having

Fuel price

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ENERGY

been subsidised. Much depends on the particular reference used to calculate the real cost of the fuel in question. In the case of transport fuels, many international organisations tend to base their calculations on the price-gap approach â&#x20AC;&#x201C; given that crude oil and its refined derivatives are globally traded commodities, the cost of the subsidy to domestic fuel is calculated as the revenue that the government in question has foregone by not selling it on the global market. The total subsidy is thus, in effect, the opportunity cost of using that fuel domestically at a price lower than the open market. The International Energy Agency, which follows the price-gap approach, estimated through this method that fossil fuel subsidies cost the UAE $22bn in 2013 alone. The argument against such an approach is that it only considers fuel as a commodity, and not as a potential source of comparative advantage within an economy. The counter-argument would be that for a nation blessed with domestic supplies of oil, the additional economic activity spurred by a comparatively lower cost of fuel may, for a time, outweigh the cash benefit of selling such fuel at a higher price, either domestically or on international markets. For those who follow such a line of thought, the reference price for calculating energy subsidies should not be the global price, but rather the (domestic) cost of production. If the fuel in question is being sold at below the cost of production, then the deficit is being made up by a direct cash transfer by the government: a subsidy, even if it is paid for by the profit gained from selling a certain portion of that fuel on the global market. By contrast, if the domestic price remains above the cost of production, but below the global price, then proponents of the production costs approach consider it misleading

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ENERGY

to speak of subsidies. Rather, the question becomes purely a theoretical one related to opportunity costs: whether or not the foregone revenue is made up for by the additional domestic growth produced by comparatively cheaper fuel, something which is often difficult to prove either way.

petrol rose by 24%, according to a September 2015 report from Qatar-based daily Gulf Times. In this light, other Gulf countries may find it difficult to immediately follow the UAE, though they might begin with a gradual move to increase the cost of fuel, in line with the UAE’s own policy.

Other perspectives

Supporting change

In developmental terms, one could argue that it makes perfect sense for the government of an oil-rich, but less-developed nation to initially sell fuel domestically at below the global price, but above the cost of production, in order to maximise the comparative advantage of cheap energy. However, as that economy grows and develops – and indeed, reaches a stage of development comparable to leading economies – there is a greater likelihood that the gains of cheaper energy will be used inefficiently. Moving toward a price that is closer to the open market will thus not only encourage more efficient use of fuel, but also allow the government to allocate the previously foregone revenues more effectively, for instance, through economic diversification programmes. One can argue that it is precisely this strategy the UAE authorities have been pursuing. The price of domestic transport fuel has not been suddenly liberalised, which is generally considered a disastrous policy. Rather, the fixed price of both petrol and diesel has risen steadily over the past decade or so. According to a May 2014 report from the International Institute for Sustainable Development’s Global Subsidies Initiative, the price per litre for petrol rose from the equivalent of $0.29 in 2002 to $0.47 in 2012 and from $0.30 per litre to $0.64 over the same period for diesel. By comparison, in neighbouring Saudi Arabia over the same period the cost of petrol fell from the equivalent of $0.24 per litre to $0.16, while diesel dropped from $0.10 to $0.067. As a result of this policy, by 2015 fuel prices within the UAE were already the most expensive in the Gulf region, and the move to the new pricing system in fact resulted in the cost of diesel initially falling by 29%, while the cost of

Alongside steady increases in the price of fuel, the UAE has also invested in providing alternatives for its lower-income residents. Suhail Al Mazrouei, the minister of energy, told The National that those on a budget “will have a choice to make”following the increases.“In any society, any civilised society, people with low incomes take public transport, except in the UAE and the Gulf,” he said.“Everyone drives a car even if they cannot afford to drive a car. We cannot ask the government to subsidise those people when they shouldn’t drive cars. Public transportation is good and we are spending a lot of money and time to improve it.” At the same time as these moves were made, Abu Dhabi began implementing a system for administering subsidies for liquid petroleum gas (LPG). LPG remains a fundamental resource in the emirate, as Abdulla Salem Al Dhaheri, CEO of ADNOC Distribution, told OBG.“In Abu Dhabi City, approximately 98% of all cooking in the residential sector is done using LPG,”he told OBG.“Meanwhile, on Abu Dhabi’s islands, 65% of the buildings utilise central LPG installations with rooftop storage tanks. The majority of the remaining multi-unit

36 FEBRUARY 2017

buildings, villas, commercial establishments and industrial plants use LPG cylinders and outside storage tanks as sources for LPG for cooking and heating.”

More efficiency In the second half of 2015 ADNOC Distribution began introducing Rahal e-Gas cards, which provide a monthly allowance for subsidised LPG. The rate varies between Emirati nationals and expatriates: the former can receive a monthly subsidy of up to Dh150 ($40.83) for families and Dh70 ($19.05) for single people, while for the latter the figures are Dh70 ($19.05) and Dh40 ($10.89), respectively. The move was taken in order to limit the illegal use of subsidised LPG – given the variation in subsidies between different emirates – but can also be seen as an innovative use of technology to limit the kind of excessive consumption that subsidised fuel can often entail. The shift to e-Gas cards is in keeping with ADNOC Distribution’s recent investment in technological solutions under the company’s adoption of new smart initiatives, which have included implementation of radio-frequency identification tag-based authorisation and payment; near field communication readiness; and mobile business-to-business and business-to-consumer e-commerce platforms. Al Dhaheri told OBG,“We are hopeful that SMART service will bring in a culture of continuous improvement in the way we do business.” Through a combination of innovative policies and the application of technology, Abu Dhabi and the UAE seem to be demonstrating that, with concerted effort and long-term planning, it is possible to imagine a future for the Gulf region beyond the blanket subsidisation of energy. What is also clear, however, is that neighbouring states may struggle to follow the UAE’s lead any time soon. For their part, UAE authorities appear content to strike their own course. As Al Mazrouei remarked in his recent interview,“We are not comparing ourselves to other countries any more. We are aspiring to build one of the strongest economies in the region.” www.oxfordbusinessgroup.com

CARGO SERVICES

A cargo-dedicated airport speeds supply chain efficiency, as is demonstrated at the Rickenbacker International Airport in Columbus, Ohio. This article by www.inboundlogistics tells us more about the airport and its efficient cargo handling services

crew at Rickenbacker International Airport in Columbus, Ohio, recently unloaded a 777 in just 90 minutes. A feat lauded by Christopher Dale, president and chief executive officer, Hellmann Worldwide Logistics, USA. Once the plane was unloaded, the goods were trucked a mere 50 yards to a warehouse.“A plane lands, and it’s immediately unloaded, versus waiting in queue,”he says, which, he adds, is not always the case at other airports. That speed translates to more efficient and cost-effective supply chains. Rickenbacker International Airport is a key element of Rickenbacker Inland Port, a multimodal logistics hub that offers efficient distribution through much of the US and Canada. The inland port is home to providers of logistics, warehouse, and aviation services. It offers direct connections to major ocean ports by rail on both coasts, including Norfolk, Va, New York, Los Angeles, and Savannah, Ga.

Airplane near the terminal in an airport

38 FEBUARY 2017

With the 2009 opening of the Heartland Corridor, the rail routing between the Port of Virginia and Chicago through the Norfolk Southern Rickenbacker Intermodal Terminal became incredibly efficient, and increased freight capacity by allowing double-stacked intermodal trains to travel through the tunnels of the Appalachian Mountains. It also removed countless trucks from congested highways and saved transit times for customers.“The whole area is accessible by major freeways and rail systems,”Dale says. In addition, Dale notes that roughly half the US population is within a day’s drive of Rickenbacker.“It’s really well-placed, geographically,”he asserts, adding,“For decades, it’s been a well-kept secret. We see Rickenbacker as a better alternative to Chicago or New York for cargo, based on ease of use, user-friendliness, and lack of congestion when off-loading or loading a plane.”Hellmann has worked with Rickenbacker for about 25 years.

r a C

a d te

a c i d e

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t r o irp

FEBRUARY 2017 39

CARGO SERVICES

Public-private collaboration “One of the port’s greatest advantages is the collaboration across so many different parties,” says David Whitaker, vice president, business development with the Columbus Regional Airport Authority (CRAA), which operates Rickenbacker International Airport, adding,“Our successes come from everybody rowing in the same direction.” This includes the businesses within the port, the

40 FEBUARY 2017

organisations that help to run it, and elected officials at all levels of government. This year, Rickenbacker International Airport will handle about 100,000 metric tonnes of cargo, according to Whitaker. The majority of that will come from imports, although the export side is growing. The airport is cargodedicated, and handles a dozen scheduled international flights each week. It also hosts a

COUNTRY REPORT - BAHRAIN

Ohio, as well as many other automobile manufacturing plants that dot the Midwest and Detroit.“We really like the auto parts sector, both import and export, and are focused on that as well,”Whitaker says. Along with many goods and products, Rickenbacker is a certified livestock exporter. It has moved horses, cows, goats, and even Harapan, a rare Sumatran rhinoceros. The rhino left the Cincinnati Zoo and flew via Rickenbacker aboard a Cathay Pacific Cargo freighter, bound for a Sumatran Rhino Sanctuary in Jakarta, Indonesia, to help increase the population of his species. While Rickenbacker had been an importonly market, that’s changing. Many of the carriers operating at the airport now provide both charter and scheduled export flights for a range of commodities, Whitaker says.“We’re working hard to diversify and increase the volume of exports as expeditiously as we can,” he explains. To accomplish this goal, airport staff provide shippers, forwarders, and others with information about the market, the services available through Rickenbacker Inland Port, and the ways in which they can connect with carriers and efficiently move goods to and from the airport. That way, they can provide the top-notch service their companies, and customers are demanding at a reasonable cost.“Once companies use Columbus, most continue because it’s a very good experience,”Whitaker says.

Multimodal

Airplane near the terminal in an airport

passenger charter terminal, with up to 17 flights each week. The military has a strong presence at the airport as well, Whitaker adds.

Import and export expertise Historically, the airport has been known for its ability to manage fashion imports. L Brands, the company behind Victoria’s Secret, PINK, Bath & Body Works, La

Senza, and Henri Bendel, among others, is headquartered in Columbus. In addition to fashion, Rickenbacker International Airport has gained experience and expertise handling auto parts, electronics, and other products. Indeed, its auto parts operations are poised for growth, given Rickenbacker’s proximity to Honda’s manufacturing plant in Marysville,

“No area is better situated geographically than Columbus in terms of reaching North American consumers quickly,”Whitaker says. Studies have shown that Columbus can claim the greatest access to the largest percentage of US and Canadian consumers in the shortest amount of time. Rickenbacker Inland Port leverages this geographic advantage with a heavy focus on logistics across both public and private sectors. Along with the shippers, forwarders, rail and trucking companies, and the airlines, numerous government agencies work diligently to continually develop the infrastructure that will enable companies to move their goods as efficiently and easily as possible.“The city, CRAA, and state and federal government support has been extremely helpful in

FEBRUARY 2017 41

CARGO SERVICES

Long-term customers

continuing to make investments and improve the logistics infrastructure,”he adds. A case in point is the new air cargo terminal, which opened in May of 2016, and represents the combined efforts of multiple public and private entities. A private company built the building, while several public agencies handled construction of the roadways, parking lots, utilities and ramp, among other features. The terminal currently offers 85,000 square feet of warehouse space, and 15,000 square feet of office space, and can be expanded into a quarter-million square foot facility. This facility is just one of five air cargo terminals at the airport that, when combined, make up more than 600,000 square feet of terminal space. It is home to a large cross section of the logistics and supply chain industries, including airlines, freight forwarders, shippers, and a staffing agency. While each company has its own offices, the shared kitchenettes and conference rooms encourage collaboration, and the efficiencies and idea-sharing that can result. CRAA also manages Rickenbacker Global Logistics Park, part of a growing logistics complex that offers more than 68 million square feet of distribution space, with room for expansion. Tenants have easy access to road, rail, and air transportation.“The cross section of capabilities make this a one-stop shop,”Whitaker says. Rickenbacker’s Foreign-Trade Zone (FTZ) #138 is another strong selling point for

42 FEBUARY 2017

businesses to operate within the inland port. For the third consecutive year, FTZ #138 was ranked among the top 10 FTZs in the United States as measured by the value of goods moving through it. FTZ #138 is headquartered at Rickenbacker Inland Port, and provides services to a 25-county area within central Ohio. Rickenbacker’s FTZ #138 is the top zone in the entire country for apparel and footwear entries, receiving an astounding 70 per cent of goods entered into the US FTZ programme in that particular category. An FTZ is a site within the United States that is considered outside Customs territory. That means some goods may be brought into the site duty-free, and without formal Customs entry. Companies use FTZs to lower their costs and save time on customs clearance, manufacturing, and re-export activities.“Companies can defer, reduce, or eliminate duties by being active in a foreigntrade zone,”Whitaker says. Companies working within FTZs also can consolidate entries of international shipments. (A Customs entry refers to information on imported or exported goods that’s provided on a duty entry form and submitted to Customs authorities.) Rather than record each shipment, companies operating within an FTZ can consolidate shipments and submit one weekly entry. “Consolidated entries can save significant amounts of money alone, along with the benefits of duty deferral,”Whitaker says.

The companies and organisations that try Rickenbacker tend to become long-time clients. For instance, executives received a call from a large chemical firm that was using a coastal port.“They called and said, ‘tell me about your inland port,’”Whitaker says. The airport and economic development professionals in the region began working with the company.“Today, they’re operating their largest warehousing distribution facility in the Rickenbacker area, and are completely delighted with their success here,” he smiles. One reason organisations that give Rickenbacker a chance often appreciate the results is the fact that it’s a“service-oriented community”. When an organisation hasn’t used the airport or the port before, its leaders typically have numerous questions about how their goods will move through it, how long it might take, how they’ll connect to truck or rail transportation, and the amount and type of warehousing and ground handling services available.“Potential customers have long lists of questions, and we’re here to answer them,” Whitaker says, adding,“We respond to emails. We pick up the phone. We meet people on the ramp. We help them connect the dots and make sure their process goes smoothly.” Another key benefit is the lack of congestion. Rickenbacker International Airport offers fast, efficient operations.“We’re cargo-dedicated, provide great service, and enable cargo to move more quickly than other airports,” he clarifies. The overall benefit of quality service, a focus on logistics, continued infrastructure investment, and a lack of congestion comes down to speed.“What you’re paying for when you buy air cargo is speed,”he explains, noting that shippers, forwarders, and even customers pay a significant premium for air cargo. To recapture that investment, their goods need to move in a streamlined, efficient manner.“We think we’re pretty unparalleled in terms of moving goods quickly whether importing or exporting,”he claims. “We’ve strongly recommended Rickenbacker as a solution to importers and exporters in the Midwest, as well as to those in many southern states. We continue to support it. Rickenbacker offers a good opportunity for companies to improve their supply chains and speed to market,” concludes Dale. - www.inboundlogistics.com

Solutions for a healthy world Tranzone operates a state-of-the-art 3PL warehouse in Jebel Ali Free Zone. We have partnerships with the leading pharmaceutical, medical device and animal health companies around the world

Healthcare Logistic Services: Air Freight Sea Freight Land Transportation Value Added Services Warehousing & Distribution Return logistics Documentation Tranzone FZCO (Member of Banaja Holdings) Jebel Ali Free Zone (South) Plot No: S20129 P.O Box : 262955, Dubai, United Arab Emirates Tel : +971 4 811 0000 Web: www.tranzone.ae

IATA FREIGHT ANALYSIS

Analysing the trends

Global air freight tonne kilometres (FTK) grew by a robust 6.8 per cent year-on-year in November 2016, and although the wider world trade backdrop remains weak, business surveys point to near-term momentum for air cargo. Here are the important elements of IATAâ&#x20AC;&#x2122;s latest Freight Market Analysis

44 FEBUARY 2017

IATA FREIGHT ANALYSIS

ata shows that the month of November underlined a strong peak season in 2016 for air cargo. Global air freight tonne kilometres (FTKs) increased by 6.8 per cent year-on-year in November 2016. This was a slowdown from Octoberâ&#x20AC;&#x2122;s pace (a 20-month high of 8.4 per cent), but it was still more than two-and-a-half times the average annual growth rate seen over the past decade (2.6 per cent). Once again, European and Asia Pacific airlines accounted for more than half of the annual increase in industry-wide FTKs, with smaller positive contributions coming from those in the Middle East, North America, and Africa. (See Chart 1) By contrast, Latin American carriersâ&#x20AC;&#x2122; freight volumes fell in annual terms for the 21st time in 23 months. Alongside, there was a steady rise in business surveys. Industry-wide FTK volumes dipped in seasonally-adjusted (SA) terms in November, although the key point is that the upward trend accelerated in H2 2016. (See Chart 2) The pick-up in the FTK trend has coincided with a steady and ongoing rise in the new export orders component of the global purchasing managersâ&#x20AC;&#x2122; index (PMI) over the same period. This component reached a fresh 26-month high in December, and, if sustained at current levels, suggests that air freight will carry moderate momentum into the first half of 2017. (See Chart 3) More generally, the latest data further underline the strong peak season for the industry in late-2016. As noted before, the intensity of the latest peak may, in part, relate to some one-off factors, including potential mode shift to air freight, following the collapse of the Hanjin shipping company in late-August 2016. But recent strength has clearly been supported by developments in the traditional demand drivers of growth too. Certainly, the outperformance of air freight, relative to developments in wider world trade flows during Q3 2016, mirrored a rise in semiconductor material shipments over the same period. (See Chart 4) Moreover, given the rising popularity of sales events, such as Black Friday and Cyber Monday, and their corresponding focus on traditionally airfreighted items, including consumer electronics, the

Chart 1

Contributions to annual FTK growth by airline region of registration

Sources: IATA Economics, IATA Monthly Statistics

FEBRUARY 2017 45

Chart 2

FTK levels

Sources: IATA Economics, IATA Monthly Statistics

intensity of the 2016 peak period may be a sign of things to come for future years.

Wider weakness in world trade conditions remains an ongoing concern Data compiled by the Netherlands CPB show that world trade volumes have trended sideways for the past two years or so. In fact, global trade volumes fell in year-on-year terms in October 2016 for only the third month in almost seven years. Against this backdrop, the big uncertainty remains how strong the underlying trend for air freight will be once the peak periods have ended. But the latest data further indicate that air freight ended 2016 on a high, and this should provide a solid base for year-on-year growth rates in early-2017.

SA load factor has rebounded from early-2016 low Industry-wide, freight capacity increased by 4.4 per cent year-on-year in October. The upward trend in available freight tonne kilometres has slowed markedly in recent months, in part owing to a slowdown in deliveries to the wide-body passenger fleet (particularly in Asia Pacific). The combination of rising demand and the easing in the trend for capacity has caused the seasonally-adjusted industry-wide load factor to rise by around two-and-a-half percentage points since its recent low in early-2016. For the second month in a row,

46 FEBUARY 2017

Chart 3

Air freight growth vs. global new export orders

Sources: IATA Economics, IATA Monthly Statistics, Markit

freight load factors increased in annual terms for all regions in November except Africa. European airlines’ growth remains robust. International FTKs increased by a robust 6.9 per cent year-on-year in November, albeit down from the 9.5 per cent increase registered in October. (See Chart 5) Annual growth in international FTKs flown by European airlines slowed to nine per cent in November, from 13.3 per cent previously. The slowdown was possibly influenced by strikes at Lufthansa during the month, although the bigger picture is that such growth is well ahead of the series’ 10-year average rate (2.2 per cent), and the seasonally-adjusted trend remains very strong. This ties in with ongoing strength in the new export orders component of the German PMI, helped in part by ongoing weakness in the Euro. Despite domestic economic and political upheaval, Turkish Airlines in particular, has also grown very strongly this year. The hub nature of their operations helps to explain the recent strength of the international ‘Within Europe’ freight segment (+64 per cent yearon-year in October).

Broad strength in Asia Pacific business surveys Carriers based in the Asia Pacific region, who fly almost 40 per cent of all international FTKs, also reported robust demand growth (5.9 per cent year-on-year in November).

In seasonally adjusted terms, volumes have risen at an annualised rate of 15 per cent since March, and are finally back to levels reached in the aftermath of the global financial crisis (GFC) in 2010. Encouragingly, business surveys in much of the region increased in the final months of 2016: Japan’s new export orders component has held up above the 50-mark for four months in a row, and is likely to be helped further by the recent weakening in the Yen. Meanwhile, the same measures in Taiwan and Korea posted 26 and 36-month highs respectively in December, while that for Vietnam climbed to its highest level since the series began in early-2011. At a segment-based route level, the main freight lanes out of Asia are performing well. Having trended downwards in SA terms between 2010 and the start of 2016, traffic on the Europe to Asia route has now risen at an annualised rate of more than 30 per cent since March; volumes increased by 10.7 per cent year-on-year in October (the latest data available). International traffic within the Asia region has also trended upwards strongly since early 2016, with growth of 12.5 per cent year-on-year in October.

Middle Eastern growth has stepped down a gear International FTKs flown by Middle Eastern airlines increased by a solid 7.9 per cent year-on-year in November. Middle Eastern

IATA FREIGHT ANALYSIS

Chart 4

Chart 5

Selected trade indicators

Sources: IATA Monthly Statistics, SEMI, RWI/ISL, CPB *Seasonally-adjusted quarterly data (estimates for Q4’16)

carriers have benefited from the strong peak demand in recent months, although growth had stepped down a gear in 2016. (International FTKs grew by 6.5 per cent year-on-year in January-November 2016, compared to 11.9 per cent in the same period of 2015). While growth picked up in October, conditions on the biggest routes to and from the Middle East (those between Asia and Europe) have weakened: FTKs on such routes grew by just four per cent in 2016 to date, compared to eight to 11 per cent over the same period in 2015. Annual growth in international traffic flown by North

Chart 6 Middle Eastern carriers have benefited from the strong peak demand in recent months, although growth had stepped down a gear in 2016.

International FTK growth by carrier region of registration

Sources: IATA Economics, IATA Monthly Statistics

American airlines eased in November, but still remained robust (5.4 per cent). Freight traffic across the Atlantic has strengthened considerably over the past few months, with FTKs up by nine per cent year-on-year in October. This has been driven in part by increases in westbound flows from Germany, Italy, and the Netherlands to the US, aided by the strong dollar. (See Chart 6) The flip-side, of course, is that the strength of the dollar has kept US outbound air freight under pressure over the past few years. Following the boost to traffic seen in 2015 from US west coast seaport disruption and airbag recalls, freight volumes on the

US trade by air (change in million kgs, October 2016, year-on-year)

Sources:IATA Economics, US Census BureauTop

Transpacific market have fallen by nearly three per cent so far this year to date. But there are also signs of recovery on this market, with year-on-year traffic growth accelerating to 6.8 per cent in October, driven by increased US trade by air with China and Japan. (See Chart 6) The recovery in international FTKs flown by Latin American carriers from the weakness in H1 2016 paused in November. The (SA) series is now back broadly in line with where it started the year, but FTKs remain around 10 per cent lower than their peak in late-2014. The ‘Within South America’ market has been the weakest performing market in 2016 to date, with volumes down nearly 20 per cent compared to the same period in 2015. Although volatile on a monthly basis, African carriers’ international traffic looks to have held on to the strong (SA) gains seen during Q3. Annual growth in international FTKs flown by African airlines jumped to 12.8 per cent in November. However, freight capacity has continued to grow far faster than demand, driven by rapid long-haul expansion (particularly by Ethiopian Airlines) and increases by North African carriers. As a result, the African international freight load factor fell in annual terms in November for the 19th consecutive month, and posted an all-time low for the month of just 26.1 per cent. - David Oxley - economics@iata.org

FEBRUARY 2017 47

ISLAMIC BANKING

48 FEBUARY 2017

ISLAMIC BANKING

Islamic banking gains

strength Regulators are encouraging mergers and acquisitions in Bahrain’s Islamic banking industry in a bid to cement the country’s position as one of the world’s leading shariacompliant ﬁnancial centres. This Oxford Business Group article provides more insights

n early December the governor of the Central Bank of Bahrain (CBB) repeated calls for the country’s Islamic lenders – of which there are currently six retail and 18 wholesale – to consider engaging in a round of mergers or acquisitions to hone their competitive edge in the market. Giving a keynote address at the 23rd Annual World Islamic Banking Conference (WICB) in Manama on December 6, CBB governor, Rasheed Mohammed Al Maraj, said the small size of many Islamic banks was a factor that limited their competitiveness, especially in comparison to their conventional rivals. The conference is not the first time the CBB head has promoted consolidation as a means of strengthening Bahrain’s Islamic banking sector. Al Maraj had previously called for streamlining the number of operators in the segment at the same event in 2015.

FEBRUARY 2017 49

ISLAMIC BANKING

The calls from the CBB governor look likely to be taken on board in the medium term, according to a report issued by financial services firm KPMG in 2016. Increased movements in mergers and acquisitions in Bahrain’s banking sector can be expected as lenders seek to strengthen their operational base and reduce their exposure to high-risk sectors of the economy, such as real estate and energy, the report stated. “Mergers and acquisitions will continue to be explored and small and mediumsized banks are expected to synergise to improve the chances of survival through effective human capital utilisation, liquidity management and capital utilisation,”the report said. Enhancing competitiveness is set to become increasingly important as Bahrain’s status as a financial centre faces challenges from the development of financial services industries elsewhere in the region that rival those of the kingdom, according to the report. These challenges could weigh more heavily on the Islamic component of the Bahraini banking sector, given the increased emphasis on this segment in other Gulf states.

Mergers in motion One bank that has already heard the CBB’s call is Gulf Financial House (GFH), the regional sharia-compliant lender listed on the Bahrain, Dubai and Kuwait exchanges.

50 FEBUARY 2017

GFH is in the process of acquiring Bahraini lending bank Alkhair, according to its chief executive Hisham Al Rayes. The sale should be concluded some time in the first quarter of 2017, he told Reuters on December 6. Negotiations for the Alkhair acquisition opened in October, after GFH announced its interest in the smaller bank in August. The process of consolidation in the local market could be advanced still further in 2017, with Al Rayes stating that GFH was also looking to conduct a merger with another unnamed Bahrain-based bank in the new year.

Maintaining the edge While operators in the sector are being encouraged to consider mergers and acquisitions, Bahrain’s Islamic banking segment is already working from a position of considerable strength, according to the newly released “Islamic Finance Development Report 2016”. The report, prepared by Thomson Reuters and the Islamic Corporation for the Development of the Private Sector and issued on December 8, ranked Bahrain as the leading Islamic finance market in the Gulf and MENA region and second out of 124 economies globally, coming in behind only Malaysia. The assessment was based on the Islamic Finance Development Indicators (IFDI) – an annual measure of the overall development

of the global Islamic finance industry. The IFDI assesses five key pillars of the banking industry: quantitative development, knowledge, governance, corporate social responsibility and awareness. Ranking highly across all criteria, Bahrain was rated as the global leader in governance due to its strong and well-established regulatory environment. This environment is set to become even stronger, with the CBB working to further improve accountability and risk management practices, as highlighted by the bank’s governor in his address to the WICB in 2016. As part of this process, the CBB has proposed implementing the requirement that Islamic banks be subject to annual external sharia audits of their operations. This would replace the generally accepted practice of having sharia compliance audits conducted in-house. Under the proposal put forward by the CBB, the external sharia experts conducting reviews of Islamic banks would have to be approved by the central bank. These and other measures, such as tightening up requirements over disclosures of potential conflicts of interest, and reinforcing transparency and accountability, are aimed at maintaining Bahrain’s reputation as having one of the world’s strictest sharia-compliant jurisdictions. -www.oxfordbusinessgroup.com

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The driverless vehicle RTA - it’s a success

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COMMERCIAL TRANSPORT

The Actros truck

turns 20

Mercedes-Benz Trucks launches special edition Actros truck to celebrate model’s 20th anniversary

ercedes-Benz Trucks MENA of a mobile phone whilst driving. The truck’s recently celebrated 20 FleetBoard telematics system provides not years in the region with the only vehicle tracking, trip recording, and launch of a special edition professional fleet management, but also model. The Actros truck continuous analysis and rating of driver the marquee - is 20 years old and together and vehicle performance, enhancing the with Emirates Motor Company (EMC), its operational excellence of the truck. authorised distributor in Abu Dhabi, the Further specifications include the powerful company also held the launch event there. engine and transmission cooling system, air The event at the Endurance City included intake on the upper side of the cab, and a a live demonstration of the Actros 3844 S tandem air cleaner that provides outstanding 6x4 tractor-head model, and of its state-ofrobustness and reliability, even under the the-art equipment and innovative safety MENA region’s extreme climate conditions. systems by professional Mercedes-Benz The Actros 20 Years Edition also features a driver trainers from Germany, and the performance optimised hydraulic retarder, an Training and Product Management team of additional braking system, ensuring highest Daimler Commercial Vehicles MENA. levels of braking performance with no wear Powered by a highly fuel-efficient sixof brakes and brake linings. cylinder engine (Euro three) boosting 435 Key highlights of the Actros 20 Years horsepower and 2,100 NM of Edition are the various statetorque, the heavy-duty truck of-the art safety features, The comfortable providing maximum active delivers great performance, thanks to the power transfer and passive safety – an area and spacious to the two driven rear axles via that Mercedes-Benz has been L-Cab is fully a twin-plate clutch, and the pioneering in the industry for reliable and efficient 16-speed more than 50 years. Besides painted in a Mercedes PowerShift automated the standard electronically carbon black gearbox. Mercedes PowerShift controlled Telligent braking provides specific driving modes system with Anti-lock metallic colour that support the driver in braking system (ABS) and mastering all traffic situations Acceleration skid control enhanced with with ease and convenience, thus (ASR), the truck is also dynamic silver facilitating the driver’s level of equipped with the optional concentration. stripes with the Active Brake Assist. The Accident prevention is also Active Brake Assist system 20 Years Actros operates with three radar facilitated by the Bluetooth radio, enabling hands-free use beams, which constantly scan emblem.

52 FEBUARY 2017

an area of one to 200 meters ahead of the truck. Radar detection of a collision with a moving obstacle would result in the driver been given a visual and audible alert by the system. Depending on the severity of the situation, the system will react with a partial braking manoeuvre, and, if necessary, even initiates an emergency braking to standstill. Thus, the Active Brake Assist helps to avoid dangerous rear-end collisions, for instance at the end of a traffic jam, and minimises the impact for occupants in case a collision is inevitable. The Actros 20 Years Edition features further safety systems, such as a Driver Airbag, a Telligent® Proximity Control, and

ISLAMIC BANKING

Telligent Lane Assistant. Telligent Proximity Control automatically adjusts the speed of the truck according to the traffic situation, constantly analysing the distance of vehicles driving in front of it. Additionally, if a sudden obstacle appears, such as a vehicle changing lanes, the driver is warned both visually and audibly. The Telligent Lane Assistant features a digital camera behind the screen, detecting the vehicle position in relation to the lefthand and right-hand lane markings. When activated, the system helps the driver to stay in lane by giving audible warning signals when accidentally leaving the traffic lane. The additional front mirror increases the

visible area in front of the truck, helping to recognise pedestrians or obstacles quickly. Roland Schneider, President and CEO of Daimler Commercial Vehicles MENA, said, “The launch of the 20 Years Actros Edition is yet another milestone in the success story of our iconic flagship truck in the MENA region. The model’s state-of-the-art safety features and the highly fuel-efficient drivetrain underline the technological leadership of Mercedes-Benz Trucks. The Actros provides the ideal product solution for customers seeking the highest safety and efficiency standards.” The comfortable and spacious L-Cab is fully painted in a carbon black metallic colour

enhanced with dynamic silver stripes with the 20 Years Actros emblem. The impressive design is complemented by chromed air-horns on top of the cab and an LEDilluminated Mercedes-Benz star on the front. All features of the Actros 20 Years Edition are available from the Mercedes-Benz Trucks factory in Woerth/Germany, and can be ordered through the authorised Mercedes-Benz Truck distributors across the MENA region. Professional driver training is offered by Mercedes-Benz and its General Distributors to instruct fleet managers and drivers on how to operate the truck and its features, focusing on maximum safety and efficiency.

FEBRUARY 2017 53

Growth by

resilience Regarded as one of the region’s most successful logistics and supply chain service providers, Almajdouie Logistics Co has a unique formula for success, as CEO Baheej Biqawi shares with Global Supply Chain

lmajdouie Logistics Co (MLC) has come a long way from its beginning as a land transport company in 1965. It is today one of Middle East’s most successful logistics and supply chain service providers, catering to diverse industries in the region. “We have grown to become a family of 3,700 employees, with over 2,200 trucks, 1,800 trailers, and two million sq metres

54 FEBUARY 2017

PROJECT LOGISTICS

FEBRUARY 2017 55

of terminal and storage facilities in the region,” says Baheej Biqawi, CEO, MLC, adding,“Contrary to the slowdown, in 2016, we stayed resilient, and expanded our operations in most of the GCC countries, as well as in Korea and Japan. We are also planning to tap into the larger Middle East region in 2017, in places like Turkey and Morocco.” Biqawi welcomes the new year at MLC with several prestigious international awards, which endorse their team’s commitment to meeting their goals. While oil and gas remains central to the region’s development, governments in the

56 FEBUARY 2017

GCC have revealed some ambitious growth plans. At MLC, this means they need to only continue what they have been doing all along – catering to customers from diverse industries and locations in the region, such as O&G, petrochemical, power and utilities, FMCG, infrastructure, etc. “Our leadership has always understood the importance for logistics services providers to diversify their service offering

and to continue to reinvent themselves. We see the regional expansion as an opportunity for us to take on a larger role in terms of our investment and expertise, especially since these countries are widening their industrial base in order for them to transform their economy. Despite lower oil prices, the economic growth was driven by non-oil economic sectors and construction activities, related to the capacity expansion

PROJECT LOGISTICS

of each country, and their individual pursuits to become global logistics hubs. According to BMI (country risk report 2017), the growth of the non-oil sector and infrastructure, which was a direct result of the 2000’s oil price boom, will still spill over to 2017 as some of these key projects are still underway,” explains Biqawi. And MLC’s plan is to continue to strengthen their offering. “The logistics industry will continue to see changes. The corporate sector faced a much more challenging macroeconomic environment, amid contractions in public spending, rising energy costs, and tightening

liquidity. According to the BMI report (2017), Saudi Arabia’s economic growth will slow considerably in 2017, and pick up in 2018. We firmly stand behind the government’s economic programme, and believe it has the potential to significantly overhaul Saudi Arabia’s economy and administrative apparatus,” he adds. This is the time to get creative, and at MLC, they are taking the challenge with a positive attitude, looking to lead in terms of both strategy and investment.“The diversification milestones mean that GCC governments will rely less on government financing, and see an increase in investment by the private sector. Creating a successful partnership between private sector investors and the government will be a critical factor in shaping the economy over the coming years. For example, Saudi 2030 vision entails that the private sector increases its contribution from 40 per cent to 65 per cent of GDP. This provides an immense opportunity to increase our scope and widen our reach in the market. We have already started by investing in lands near major ports, as well as conducting feasibility studies to build, own, and operate intermodal hubs connected to the expanding railway network,” states Biqawi. With the 16 per cent fall in revenue in KSA, compared to 2015 (MEED, 2016), the government’s recent fuel reforms have increased prices for petrochemicals feedstock. This is the main challenge for logistics providers - to offer value-added services to the client, while remaining profitable.“In our case, we have taken steps to manage operational costs in support of industries in such challenging times. As a Saudi-owned company, it is partly our responsibility to support the national growth of KSA. We also plan to sustain our growth in both assets and our team, whilst continuing to expand in challenging times,” asserts Biqawi. “The logistics sector is expected to continue to enjoy areas of growth in the energy sector, with new petrochemical plants set to be operational in the next five years. Also, despite budget cuts in infrastructure projects, the railway sector will continue its growth in the development of the GCC railway network,” he concludes.

Moving MD90 Aircraft in the Kingdom On November 17, 2016, Almajdouie Logistics Company (MLC) planned, executed and managed the complex move of a retired MD90 aircraft from Jeddah International Airport to Riyadh. In collaboration with Saudi Arabia Airlines, MLC technicians and engineers; specialising in the field of heavy transport, designed the transportation plan for its final destination at the Saudi Special Forces Training Centre. To prepare for the journey, estimated to take eight to 10 days, MLC conducted a series of road tests before preselecting a route that would take the twin-engine, short- to mediumrange, single-aisle commercial jet airliner, along approximately 1,200 kilometres of roads, over five days, safely. The challenging move had to overcome the height limitation of the aircraft when placed on the trailers (exceeding 5.5 metres). In addition, the cargo had other obstacles, such as the sphere shape and the location of the tyres, making it difficult to leash to the trailers. Mohamed Ashfaq, Heavy Lift Manager in the Eastern Region, explained, “We had to redesign the trailer by removing the beams and fabricating a special saddle, to reduce the height of the cargo to less than 5.5 metres, to meet the bridge maximum clearance of 5.5 metres.” The successful move of the 43 metre-aircraft weighing 40 tonnes was a fine example of the ingenuity of the team and the comprehensive service offered to their clients.

FEBRUARY 2017 57

INDUSTRY - POLYMERS

New dangerous goods warehouse

Tristar Groupâ&#x20AC;&#x2122;s new facility in JAFZA is one of its kind in more ways than one

he Tristar Group, based in Dubai, has expanded their portfolio of services to offer customers end-toend solutions for their logistic needs. The new multi-logistics polymers facility is the first silo and bagging facility of its kind inside JAFZA, which aims to offer faster delivery to markets with its direct access to Jebel Ali Port, Maktoum International Airport (DWC), and, in the future, to Etihad Railways. The Tristar Group already offers a comprehensive list of services, catering to petroleum, chemical, and petrochemical industries, both in the region and globally. The companyâ&#x20AC;&#x2122;s core expertise lies in its ability to safely handle and distribute all types of retail fuels, lubricants, chemicals, petrochemicals, and liquid gases.

58 FEBUARY 2017

Polymer bulk and bagging warehouse The all-new multi-logistics polymers facility in JAFZA South is designed to receive bulk PP/PE granules into silos, bag the granules by a fully automated bagging operation, into FFS film bags and/or big-bags. The packed material can be stored in racking inside the 8,000-tonne capacity warehouse. The bulk material can then be received by container, Tristar has its own tilting chassis, or this operation can also be automated. Hence bulk equipment is put into 25 kg bags into the silos through automated conveyer systems. The polymers facility is being operated in partnership with SKEBERIS Plastics.

ISO tank cleaning The facility also has an in-house, fullyautomatic tank cleaning facility installed

by Groninger (Europe). The tanks will be cleaned with soft water, that has chlorine content less than 50 PPM, alongside with a high-pressure pump of 100 bar, and a boiler, designed to produce steam at 1.2 TPH, which generates hot water with temperatures of 80 degrees Celsius. A fully-automated, effluent treatment plant will treat and recycle all waste water from the cleaning station to be used for general cleaning and irrigation purposes.

Specialised warehousing for chemicals and dangerous goods The custom-built covered warehouse has the capability to offer both ambient and temperature-controlled storage for a wide range of petroleum products, including industrial solvents and soft chemicals. Total

INDUSTRY - POLYMERS

The entire Tristar facility has been designed and built to green building specifications, which is certified to LEEDâ&#x20AC;&#x2122;s Gold standard

warehouse capacity is in excess of 15,000 pallet positions. The facility has a drum filling station with capability to drum from ISO tanks,

thus providing customers with a fullyintegrated solution to receive in bulk, store, and distribute in packed condition. The semi-automatic drum filling machine has

a capacity of 50 drums per hour, and is suitable for solvents, corrosive chemicals, and lubricants handled in a safe zone. The entire Tristar facility has been designed and built to green building specifications, which is certified to LEEDâ&#x20AC;&#x2122;s Gold standard. With this facility, Tristar JAFZA has become a one-stop-shop for customers. Companies can now bring in bulk chemicals in tankers/ISO tanks to discharge into drums, as per their requirements, and these can then be palletised and moved into the warehouse for storage and distribution. The transportation of these drums can be organised through Tristarâ&#x20AC;&#x2122;s fleet, while the empty tankers/ISO tanks that are released after drumming can be cleaned at the ISO Tank cleaning station at the same facility.

FEBRUARY 2017 59

FESTIVE LOGISTICS

The best logistics’ season Amazon is ready to capture the best of the online market, with the 2016 holiday season being it’s best ever yet

60 FEBRUARY 2017

mazon made the best of the holiday season - shipping more than one billion items around the world. Forbes reports that Amazon sold enough Alexa devices and 4K TVs to reach the peak of Mount Everest more than nine times. In the holiday season of 2016, devices like Echo Dot, Fire TV Stick, Fire tablet, and Amazon Echo topped Amazon’s best-sellers list. Customers purchased and gifted a recordsetting number of devices from the Amazon Echo family, with sales up over nine times compared to 2015’s holiday season, and millions of Alexa devices sold worldwide this year.

“Echo and Echo Dot were the best-selling products across Amazon this year, and we’re thrilled that millions of new customers will be introduced to Alexa as a result,” said Jeff Wilke, CEO Worldwide Consumer, Amazon, adding,“Despite our best efforts and ramped-up production, we still had trouble keeping them in stock.” “We couldn’t have made this holiday season possible for customers without the dedication and hard work of our customer service, transportation, and fulfilment associates, along with our carrier partner,”Wilke continued, “From turning on Christmas lights and playing holiday music, to shopping for gifts and asking for help with cookie recipes, Alexa continues to get smarter every day.” According to Forbes, a recent report by the Institute for Local Self-Reliance (ISLR) claims that roughly half of all US households are subscribed to Amazon Prime, half of all online shopping searches start directly on Amazon, and Amazon captures nearly one in every two dollars that Americans spend online. “As a retailer, its market power now rivals or exceeds that of Walmart, and it stands only to grow. Within five years, one-fifth of the US’s US$ 3.6 trillion retail market will have shifted online, and Amazon is on track to capture two-thirds of that share,” according to ISLR. Source: wwwsupplychain247.com

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